There’s nothing left to liquidate in the collapsed Bear Stearns hedge fund they oversee, but the directors of the offshore High-Grade Structured Credit Strategies Enhanced Leverage Fund are appointing liquidators anyway.

In a letter to investors on Friday, board members of the offshore fund said they were “winding up the fund” by naming KPMG—the liquidators of the onshore version of the fund—as voluntary liquidators “in the interest of economy and efficiency.” The offshore fund is a feeder to the onshore Enhanced Leverage fund, which lost $650 million this summer on bad subprime mortgage bets.

The move has angered one group of Bear investors, which planned to try to oust the Bear-appointed directors at a Nov. 14 meeting in London. But the directors, in the letter, said the board “no longer has authority” over the fund, and replacing the Bear representatives “would not affect the authority of the liquidators to conduct the winding-up of the fund.”

While there are virtually no assets left for investors, the group spearheading the plan to dump Bear as the funds’ controlling party wants access to their records to buttress potential legal claims against Bear Stearns. The investors have complained that Bear is not cooperating with their effort to obtain information. A vote by investors in the onshore fund to replace Bear with a forensic accounting firm is set for Wednesday at Bear headquarters in New York.

Editor's Note

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